China Says “We are Forced to Retaliate” on Tariffs Imposed by the Trump Administration

On Friday, July 6 Beijing kept its promised to inflict tit-for-tat tariffs on an equal amount of U.S. goods after the Trump Administration imposed a 25% duty on $34B worth of Chinese goods which went into effect earlier that day.  “In order to defend the core interests of the country and the interests of the people, we are forced to retaliate,” the Chinese Commerce Ministry said in a statement.

The 25% duty rate imposed by China went into effect at midnight on July 6.  The targeted goods, which include soybeans, meat, seafood, automobiles, tobacco, and whiskey, were specifically chosen to strike President Trump’s agricultural and industrial supporters in the Midwest.  Click here to view the complete list of goods published by Sandler, Travis & Rosenberg.

China also released a second list of $16B worth of goods which will be subject to a 25% duty, although no effective date has been set at this time.  This list includes items such as coal, gas, crude oil, medical equipment, chemicals, epoxies, and adhesives.  Click here to view the complete 2nd list of goods published by Sandler, Travis & Rosenberg.

Accusing the U.S. of “typical trade bullying”, Beijing officials portrayed the Trump Administration’s threats to tax $450B worth of Chinese goods as a threat to global prosperity.  “The wrong actions of the U.S. have brazenly violated the rules of the World Trade Organization, attacked the whole world’s economic sustainability, and obstructed the global economy’s recovery” Lu Kang, a spokesman for China’s Foreign Ministry, said in a daily news briefing.

The Trump Administration Fights Back

On Tuesday, Trade Representative Robert Lighthizer announced plans to propose a 10% duty on additional Chinese goods worth $200 billion.  “For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition.  Rather than addressing our legitimate concerns, China has begun to retaliate against U.S. products” Robert Lighthizer said in his announcement.  Tuesday’s action by the U.S. Trade Representative makes good on the threat President Trump made last month to enact additional tariffs against China if they retaliated against penalties imposed as punishment for the theft of America’s intellectual property.  Here is the link to the third list of goods from the U.S. Trade Representative’s office (the list begins on page 11), which includes items such as:

  • Meat, fish and vegetables
  • Drinks such as orange juice, malt beer, and rice wine
  • Tobacco products including cigarettes and cigars
  • Building products such as sandstone and gypsum
  • Commodities including copper, lead, nickel, and tin ores
  • Chemicals such as chlorine, barium, argon, mercury, and oxygen
  • Industrial products such as metals, tires, fabrics, leather, papers and wood
  • Consumer products such as lamps, furniture, camera equipment, and dog and cat food

The U.S. Trade Representative is seeking public comment on this third list of good and will hold a public hearing in accordance with the following schedule:

Date Event
July 27, 2018 Due date for filing requests to appear and a summary of expected testimony at the public hearing and for filing pre-hearing submissions.
August 17, 2018 Due date for submission of written comments.
August 20-23, 2018

beginning at 9:30 am

The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission.
August 30, 2018 Due date for submission of post-hearing rebuttal comments.

If the White House follows through on this tariff threat, almost half of all Chinese imports to the U.S. will become subject to punitive taxes, raising prices for American consumers and debilitating the trade-dependent Chinese economy.

The Battle Rages On

On Wednesday, the Chinese government promised to retaliate and take “firm and forceful countermeasures” against U.S. threats by expanding tariffs on thousands of American products such as fish sticks, apples, and French doors.  “To protect the core interests of the nation and its people, the Chinese government will be forced to impose necessary countermeasures.”  Beijing gave no further details, but threatened earlier to take “comprehensive measures”, which has prompted fears that the Chinese government might devalue its currency (which would significantly put American exporters at a disadvantage) or disrupt operations for U.S. companies by enforcing arbitrary quarantines, increasing inspections of American products, delaying investment approvals, and even encouraging consumer boycotts.

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